Silicon Valley is a region in Northern California that is known as a global center for high technology and innovation. Located in the southern part of the San Francisco Bay Area, it corresponds roughly to the geographical area of the Santa Clara Valley.
The cities of Sunnyvale, Mountain View, Palo Alto and Menlo Park are frequently cited as the birthplace of Silicon Valley. Other major Silicon Valley cities are San Jose, Santa Clara, Redwood City and Cupertino. As of 2015, the San Jose Metropolitan Area has the third-highest GDP per capita in the world (after Zurich and Oslo), according to the Brookings Institution. As of June 2021, it also had the highest percentage of homes valued at $1 million or more in the United States, at 47%.
Silicon Valley is home to many of the world's leading high-tech corporations, including the headquarters of more than 30 businesses in the Fortune 1000, and thousands of startup companies. The Bay Area also accounts for one-third of all of the venture capital investment in the United States, which has helped it to become a leading hub and startup ecosystem for high-tech innovation, although as of 2023 the tech ecosystem had become more geographically dispersed. It was in Silicon Valley that the silicon-based integrated circuit, the microprocessor, and the microcomputer, among other technologies, were developed. , Santa Clara and San Mateo Counties employed about a half million information technology workers.
As more high-tech companies were established across the Santa Clara Valley, and then north towards the Bay Area's two other major cities, San Francisco and Oakland, the term "Silicon Valley" came to have two definitions: a narrower geographic one, referring to Santa Clara County and southeastern San Mateo County, and a metonymical definition referring to high-tech businesses in the entire Bay Area. The name also became a global synonym for leading high-tech research and enterprises, and thus inspired similarly named locations, as well as research parks and technology centers with comparable structures all around the world. Many headquarters of tech companies in Silicon Valley have become hotspots for tourism.
Etymology "Silicon" refers to the chemical element used in silicon-based transistors and integrated circuit chips, which is the focus of a large number of computer hardware and software innovators and manufacturers in the region.
The popularization of the name is often credited to Don Hoefler, the first journalist to use the term in a news story. His article "Silicon Valley U.S.A." was published in the January 11, 1971, issue of the weekly trade newspaper Electronic News. In preparation for this report, during a lunch meeting with marketing people who were visiting the area, he heard them use the term. Earlier uses outside journalism exist; for example, a May 1970 advertisement in the Peninsula Times Tribune described a Palo Alto company that "helps production people in Silicon Valley". It is possible that the nickname was coined by Washington, D.C.–based Department of Defense people who did business with California chip makers. However, the term did not gain widespread use until the early 1980s, at the time of the introduction of the IBM PC and numerous related hardware and software products to the consumer market.
The urbanized area is built upon an alluvial plainThe Frivolous Valley and Its Dreadful Conformity, by Michael Anton (Law & Liberty, published September 4, 2018) within a longitudinal valley formed by roughly parallel earthquake faults. The area between the faults subsided into a graben or dropped valley.Santa Clara Valley Groundwater Basin, East Bay Plain Subbasin Hoefler defined Silicon Valley as the urbanized parts of "the San Francisco Peninsula and Santa Clara Valley". Before the expansive growth of the tech industry, the region had been the largest fruit-producing and packing region in the world up through the 1960s, with 39 fruit canneries.Valley of Heart's Delight : Free Download & Streaming : Internet Archive. Archive.org (March 10, 2001). Retrieved on 2013-07-21.Golden Harvest...Fifty Years of Calpak Progress : California Packing Corporation, Industrial and Public Relations Department : Free Download & Streaming : Internet Archive. Archive.org. Retrieved on July 21, 2013. The nickname it had been known as during that period was "the Valley of Heart's Delight".
History Silicon Valley was born through the intersection of several contributing factors, including a skilled science research base housed in area universities, plentiful venture capital, permissive government regulation, and steady U.S. Department of Defense spending. Stanford University’s leadership was especially important in the Valley's early development. Together these elements formed the basis of its growth and success. The United States was more friendly than other countries to business investment, charging much lower taxes on capital gains since the Revenue Act of 1921, and featuring particularly loose free market controls over new business. In 1953, the Small Business Administration was created to foster startups, giving a boost to entrepreneurs. Northern California was even more welcoming, with a group of venture capitalists actively seeking high-tech business ideas, clustered on Sand Hill Road in Menlo Park and Palo Alto. California's civil code undermined the usual non-compete clauses that effectively tied employees to their companies in other states, allowing California workers to freely apply the knowledge they gained from their previous employer. This gave Silicon Valley an advantage over other American tech hubs such as Massachusetts Route 128 curving around Boston.O'Mara (2019). pp. 81–82, 111, 159–160, 279.
Early military origins
The San Francisco Bay Area had long been a major site of United States Navy research and technology. In 1909, Charles Herrold started the first radio station in the United States with regularly scheduled programming in San Jose. Later that year, Stanford University graduate Cyril Elwell purchased the U.S. patents for Poulsen arc radio transmission technology and founded the Federal Telegraph Corporation (FTC) in Palo Alto. Over the next decade, the FTC created the world's first global radio communication system, and signed a contract with the Navy in 1912.
In 1933, Air Base Sunnyvale, California, was commissioned by the United States Government for use as a Naval Air Station (NAS) to house the airship USS Macon in Hangar One. The station was renamed NAS Moffett Field, and between 1933 and 1947, U.S. Navy blimps were based there. A number of technology firms had set up shop in the area around Moffett Field to serve the Navy. When the Navy gave up its airship ambitions and moved most of its west coast operations to San Diego, the National Advisory Committee for Aeronautics (NACA, forerunner of NASA) took over portions of Moffett Field for aeronautics research. Many of the original companies stayed, while new ones moved in. The immediate area was soon filled with aerospace firms, such as Lockheed, which was the area's largest employer from the 1950s into 1980s.
Role of Stanford University
Stanford University, its affiliates, and graduates have played a major role in the development of the culture of collaboration among high-tech companies. A powerful sense of regional solidarity shaped the outlook of inventors and engineers in California; contrasting markedly from the insular and competitive environment of engineering firms on the East Coast of the United States. From the 1890s, Stanford University's leaders saw its mission as service to the (American) West and shaped the school accordingly. At the same time, the perceived exploitation of the West at the hands of eastern interests fueled booster-like attempts to build self-sufficient local industry. Thus regionalism helped align Stanford's interests with those of the area's high-tech firms.
Frederick Terman, as Stanford University's dean of the school of engineering from 1946,Frederick Terman - "When Terman returned to Stanford University in 1946 as dean of engineering, he applied his wartime reputation and experience to augmenting the university's income by encouraging research for the U.S. government [...]. encouraged faculty and graduates to start their own companies. In 1951 Terman spearheaded the formation of Stanford Industrial Park (now Stanford Research Park, an area surrounding Page Mill Road, south west of El Camino Real and extending beyond Foothill Expressway to Arastradero Road), where the university leased portions of its land to high-tech firms.Sandelin, John, The Story of the Stanford Industrial/Research Park, 2004 Terman nurtured companies like Hewlett-Packard, Varian Associates, Eastman Kodak, General Electric, Lockheed Corporation, and other high-tech firms, until what would become Silicon Valley grew up around the Stanford University campus.
In 1951, to address the financial demands of Stanford's growth requirements, and to provide local employment-opportunities for graduating students, Frederick Terman proposed leasing Stanford's lands for use as an office park named the Stanford Industrial Park (later Stanford Research Park). Terman invited only high-technology companies. The first tenant was Varian Associates, founded by Stanford alumni in the 1930s to build military-radar components. Terman also found venture capital for civilian-technology start-ups. Hewlett-Packard became one of the major success-stories. Founded in 1939 in Packard's garage by Stanford graduates Bill Hewlett and David Packard, Hewlett-Packard moved its offices into the Stanford Research Park shortly after 1953. In 1954 Stanford originated the Honors Cooperative Program to allow full-time employees of the companies to pursue graduate degrees from the university on a part-time basis. The initial companies signed five-year agreements in which they would pay double the tuition for each student in order to cover the costs. Hewlett-Packard has become the largest personal-computer manufacturer in the world, and transformed the home-printing market when it released the first thermal drop-on-demand ink-jet printer in 1984. Other early tenants included Eastman Kodak, General Electric, and Lockheed.
Rise of Silicon
In 1956, William Shockley, the co-inventor of the first working transistor (with John Bardeen and Walter Houser Brattain), moved from New Jersey to Mountain View, California, to start Shockley Semiconductor Laboratory to live closer to his mother May in Palo Alto. Shockley's work served as the basis for many electronic developments for decades. Both Frederick Terman and William Shockley are often called "the father of Silicon Valley". Unlike many other researchers who used germanium as the semiconductor material, Shockley believed that silicon was the better material for making transistors. Shockley intended to replace the current transistor with a new three-element design (today known as the Shockley diode), but the design was considerably more difficult to build than the "simple" transistor. In 1957, Shockley decided to end research on the silicon transistor. As a result of Shockley's abusive management style, eight engineers left the company to form Fairchild Semiconductor; Shockley referred to them as the "traitorous eight". Two of the original employees of Fairchild Semiconductor, Robert Noyce and Gordon Moore, would go on to found Intel.